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Many Republicans, including some of those present at Tuesday's hearing, have been reluctant to engage with the governor on implementing the Affordable Care Act.

Federal health exchange grant questioned by GOP legislators

State Rep. Steve Gottwalt (File photo: Peter Bartz-Gallagher)

Republican lawmakers used Tuesday morning’s Legislative Advisory Commission hearing on the creation of the state health exchange as a demonstration of their dissatisfaction with the process, even if their pointed questioning of Minnesota Management and Budget officials is unlikely to have any short-term effect.

The hearing gave GOP leaders the chance to examine a $42.5 million grant from the federal government, which Gov. Mark Dayton‘s administration plans to use to hire dozens of employees to continue preparing a Minnesota-designed exchange plan. The creation of state-by-state health exchanges is a vital part of the Affordable Care Act (ACA), aka Obamacare. Dayton has been a proponent of the state originating and managing its own exchange, while many Republicans, including some of those present at Tuesday’s hearing, have been reluctant to engage with the governor on implementing the ACA.

While at times confrontational, the LAC hearing only gave legislators a chance to question the federal grant. The body has no power to reject it; in its advisory role, the commission’s strongest possible action would be to vote in favor of a non-binding rejection recommendation to Dayton, who could still elect to accept the grant. If accepted, the funds would bring the federal government’s contribution toward Minnesota’s exchange to around $70 million.

The most aggressive line of questioning came from Rep. Steve Gottwalt, who made numerous references to a set of dozens of “unanswered questions” about the ultimate ramifications of implementing the exchange, and the ACA itself. Gottwalt said the questions were prompted by his meetings with business owners, who want details about the precise effect the new law will have on their companies.

“I have talked to numerous businesses that are, frankly, freaking out about what this is going to do to them,” Gottwalt said.

Gottwalt described a “growing concern on behalf of Minnesotans,” especially small business owners, about what the health care overhaul might mean in terms of taxes and employment regulations. Calling the Dayton administration’s efforts to procure federal monies “a virtual government takeover,” Gottwalt said the receipt and use of federal funds to enact policy without legislative approval could set a dangerous precedent.

MMB Commissioner Jim Schowalter said he understood Gottwalt’s concerns, but disagreed. The Dayton administration wants to involve lawmakers in the exchange process, Schowalter said, and the federal grant under review would merely help further preparations before the 2013 legislative session, when larger policy decisions could be debated and voted on by the full Legislature.

“The issue before you,” Schowalter said, “is continuing this funding so that there are some real choices before the Legislature in the coming months.”

Numerous LAC members asked what would happen if the Legislature and Dayton could not iron out the details of the exchange during the next session. While the federal government is preparing to implement exchanges in each state that does not create its own system, some GOP legislators, among them House Ways and Means Chair Rep. Mary Liz Holberg, R-Lakeville, asked whether Dayton would attempt to install his own exchange without legislative approval. Schowalter fielded these queries by saying he was not a lawyer, and did not know the extent of the governor’s authority in the matter.

Those hypothetical questions later provoked a rebuke from Sen. Tony Lourey, DFL-Kerrick. Lourey said the Legislature had repeatedly turned down opportunities to work with Dayton during the 2012 session.

“That entire line of questioning is, I believe, wrong for the people of Minnesota,” Lourey said.

As the meeting wound down,  Sen. Claire Robling, R-Jordan, acknowledged the fact that the Dayton administration would probably accept the federal funding.

“Quite frankly, this advisory commission, we can’t stop it from coming in,” Robling said.

Robling said she and her Republican colleagues wanted to make sure MMB was considering all of its options as it moved forward in the process. Following a pledge from MMB officials to respond to Gottwalt’s questions in short order, the commission chose to adjourn the hearing without taking a vote.

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